Berna Heyman, a retired college librarian from Williamsburg, Virginia, has Wilson disease, an inherited disorder that prevents copper from being excreted from the body, allowing dangerous accumulations. Untreated, it can cause serious liver, brain, and eye problems and even lead to death. Treated, the individual can live a normal life.
There are, however, very few medicines that can treat Wilson disease. The main drugs are Syprine and Cuprimine.
For years, Mrs. Heyman took Syprine, which worked well for her. Then Valeant Pharmaceuticals purchased Syprine and hiked its price from $652 for a monthly supply to an outrageous $21,267. The company bought Cuprimine, too, and jacked up its price by nearly 6,000 percent. Suddenly, Mrs. Heyman could no longer afford the copay on the medicine that she needed to avoid the terrible consequences of Wilson disease. She and her doctor searched frantically for an alternative and for financial assistance.
Valeant didn't spend a penny in research and development for Syprine and Cuprimine. Their manufacturing costs didn't go up. So why did Valeant jack up the prices of these two life-saving drugs? Greed.
The Senate Aging Committee, which I chair, recently held a hearing on Valeant Pharmaceuticals and the sky-high price increases it imposed on Syprine and Cuprimine, as well as for two other drugs it controls: Nitropress, and Isuprel. Valeant has increased the prices of all four drugs by hundreds or even thousands of percentage points. This was the third in a series of hearings the Committee has held regarding egregious price spikes for decades-old prescription drugs as part of a months-long bipartisan investigation.
Over the course of our investigation, the Committee interviewed dozens of patients like Mrs. Heyman, doctors, and health care experts from around the country and reviewed nearly a million pages of documents to better understand the causes and effects of these egregious price hikes and determine what Congress can do to counter them.
Since last fall, Valeant has said that the business unit that houses the four drugs we examined is “not core to its business or strategy” and is getting “smaller and smaller” as a share of net revenue. But the data that we reviewed revealed that the net revenues from these four drugs is rising – not falling. Indeed, their contribution to Valeant’s net income rose to a significant 23.3 percent in February. These price spikes thus appear to be very much the core of the company’s business strategy.
Among the witnesses at our latest hearing was the former CEO of Valeant, J. Michael Pearson. It was somewhat encouraging to hear Mr. Pearson say he regretted his decision to increase prices on certain decades-old drugs after his company acquired them and that price reductions were under consideration. It remains to be seen whether the new CEO will follow through and whether any reductions will come close to undoing the unconscionable increases.
Developing drugs is usually an enormously time-consuming, expensive, and uncertain process. It often takes more than a decade to bring a new drug from the laboratory to the market, and estimates of the average cost of doing so range from hundreds of millions of dollars to well over a billion dollars. Moreover, the chance a new drug will succeed is highly uncertain. If we want new medicines to reach consumers who need them, the companies that invest in the research and take the risks necessary to develop these drugs must see a fair return on their investment.
But the kind of price manipulation carried out by Valeant is a market failure with real consequences for patients like Mrs. Heyman. It has consequences for doctors who are treating individuals who need these drugs. It has consequences for our hospitals at a time when they are trying to lower health care costs, and they can’t control the cost of these drugs that they desperately need to treat their patients. This abuse of pricing is also a failure of the processes we have in the federal government to try to incentivize lower-priced generics to come to market and compete with such monopoly drugs.
To protect the American public, Congress must act to address this price manipulation. We need policy reforms, such as the bipartisan legislation I have introduced with the Ranking Member of the Aging Committee, Senator Claire McCaskill, to fast-track the approval of certain generic drugs, especially those that could compete with decades-old drugs that are vulnerable to the abusive pricing we have seen from Valeant and certain other companies. Our investigation has exposed the problem; we must now work to get solutions so that patients like Mrs. Heyman can access the lifesaving treatment they need.